Susan Kuchinskas looks to the future of content and services for rear-seat passengers
Unlike drivers, passengers want to be distracted during car journeys—especially during longer trips. So firms are designing solutions to meet that need. "Some think it's a competing model, competing with iPads, iPods and video games, all the things people bring in by hand,” says Jeffrey Vogel, senior engineering manager, ESG Automotive. “But rear-seat solutions have maintained their appeal for the OEM."
What's changing, according to Vogel, is the content delivery method. Second-row content is increasingly brought in on a memory device, such as a cell phone or tablet, to be consumed directly from the portable or else delivered to a rear-seat screen. This means the opportunity for drive manufacturers is shrinking. "The screen and connectivity business in the second row is here to grow, but mechanisms in the second row are not here to stay," Vogel says.
Whether passengers in the back remain glued to handhelds or watch a screen depends on their ages as well as the speed of the connection. In either case, he sees an emphasis on infotainment for this sector. Older kids will prefer to play games on handheld devices, because the controls and screens are better.
"Until the second row offers a better environment than they can get on an iPad or Nintendo DS, they'll be playing those portable devices,” Vogel says. “For [younger children], the second row has a value proposition in movies, videos and maybe streaming or digital TV.”
The Strategy Analytics Automotive Multimedia and Communications Service predicts the global market revenue for automotive OEM infotainment systems will grow from $20.46 billion in 2010 to $35.89 billion in 2018, a CAGR of 7.3 percent. Even if youngsters in the back seat make up a fraction of the opportunity, it's significant. (For more on infotainment, see How to manage telematics content and connectivity, Six reasons the smartphone is key to auto telematics and Telematics and in-car apps: Making infotainment cost-effective.)
But is it better than an iPad?
To compete with easily portable devices, the rear-screen experience has to offer something more: more choices, more connectivity, more convenience. AT&T and Panasonic Automotive Systems Company recently joined forces to create new infotainment and connectivity services aimed at automakers. Hakan Kostepen, director of product strategy and innovation for Panasonic, hopes to include a wide range of partners to create what he calls a "holistic approach to the connected lifestyle."
Kostepen points out that, in addition to the auto sector, Panasonic has relationships with many verticals, including aeronautics and hospitality, which could combine to create branded services and applications for delivery to the car. Of course, as a hardware maker, Panasonic wants to expand rear-screen content, and Kostepen sees the screen growing in size and importance.
"By 2015, we'll have 10-inch displays on many vehicles," he says. "The screen will become more like a smart display to connect your devices to the vehicle." For example, the display could become a sharing platform, allowing two passengers to play games running on their smartphones. (For more from Hakan Kostepen, see The Smartphone: Friend or Foe of In-car Infotainment?.)
That rear screen also could run business apps. For example, teams of road warriors traveling together by car could stay productive by accessing applications made available along with a connectivity package provided by their company. Some partners may sign on for the branding and marketing benefits.
Don't forget edutainment
John Canali, senior analyst in the Strategy Analytics Automotive Multimedia and Communications practice, doesn't see hot prospects for entertainment in the back seat. He agrees that this is a family-oriented upsell that will be most popular in minivans and crossovers. But even there, it could be a tough sell. "Kids don't necessarily need tons of new and additional content," he points out. "Most little kids are happy watching the same movie every single day."
Besides, while Americans spend more time in the car than Europeans or Asians, their children are seldom on the road long enough to watch an entire movie. For the few longer road trips, he thinks consumers are more likely to buy a cheap portable DVD player.
If you can't sell families on cartoons in the back seat, can you sell them on better grades? "The education opportunities are huge," says Woody Deguchi, vice president of sales for Rovi, provider of solutions for finding and accessing content. He points out that, if there's rear-seat connectivity via WiFi, you have full access to the Internet—including Wikipedia, library databases and schools' e-learning systems.
The back-seat ad opportunity
While distraction is an issue for the driver, most drivers want their pint-sized passengers to be distracted. Little eyes glued to the screen could add up to a big opportunity for advertisers as well as for OEMs hungry for recurring revenue.
Rovi has a robust ad distribution platform that can target adverts based on viewing habits, and it's already sending ads to television set-top boxes and Sony Bravia Internet-connected TVs. Deguchi says Rovi is getting a lot of interest from auto makers.
"You don't want ads to come up in the front panel of the navigation system while you're driving,” Deguchi says, “but ads could be included on the interface for the rear screen. It's measurable, targeted advertising, just like on the Internet. We can replicate that for the automotive space." (For more from Rovi, see Rovi: “The car is becoming a true connected device”; for more on advertising, see The role of telematics in next-gen mobile advertising and Can telematics make ads profitable in cars? .)
Rovi already provides revenue shares to its consumer electronics partners and is ready to extend this to OEMs, Deguchi says. Both Rovi and Panasonic also have white-label offerings that let automakers put their own stamp on infotainment. "It depends on the relationship and the ecosystem,” Kostepen says. “Some brands are so picky, they will want to put their brand on it.”
Susan Kuchinskas is a regular contributor to TU.
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